Marion Barry delivered his campaign speech on jobs and economic development on the curb in front of a boarded-up storefront on H Street NE, a once thriving neighborhood commercial artery devastated by the 1968 riots and virtually ignored ever since.

On that sunny June day in 1978, as the roar of passing Metro buses frequently drowned out Barry's word, unemployment in Washington hovered just under 10 percent. Youth unemployment was estimated at 70 percent. There was a building boom downtown, but much poverty, crime, drugs and hopelessness in this neighborhood less than two miles away.

It seemed like a perfect setting for Barry, the former community activist known for helping hard-core unemployed "street dudes" find jobs. He laid into the incumbent for "deliberate policies of gross neglect," and then unveiled a wide-ranging program of jobs and economic development.

Voters thought Barry, more than any other candidate, could deliver on the pledges he made that day. Yet they have proven to be some of his most difficult campaign promises to keep.

Unemployment has reached 10.5 percent, even though the mayor says he has created 7,429 jobs. He promised to spark redevelopment in some of the most depressed corridors of Northeast and Southeast Washington, like H Street. But that redevelopment remains largely in the planning stage.

And he appears to have made only limited progress toward winning the support of the business community, which some businessmen say is as important in placing people in jobs as spending government funds.

"The city is viewed as not supportive of business," said John R. Tydings, executive vice president of the Greater Washington Board of Trade. "There has been some slight improvement over previous administrations but when compared to the hospitality of Prince George's or Fairfax or Alexandria it doesn't show as probusiness yet . . . It will take a long time."

Many small merchants are also dissatisfied. Albert Russell, an optician and vice president of the Anacostia Professionals and Merchants Inc., said that at most Barry has kept "60 percent of his commitment" to small businessmen.

Barry says that he has created a "successful climate" for business development, but needs more time to translate his plans to action. "Talk to me in 1985 and you'll see all kinds of things happening around here," he said.

Some of the unemployment setbacks were due to forces beyond the mayor's control, including two recessions, layoffs by the federal government and what Barry says are Reagan administration policies that have contributed to the serious unemployment problem, nationally as well as locally.

"I can't be blamed and will not take any responsibility for the national economy," Barry said. "I don't manage that. When I ran in 1978, I never felt Ronald Reagan would be president of the United States in January 1981 and that we would be suffering the largest unemployment statistic in America in a long time."

But there also were major problems within the Barry administration.

The summer jobs for youth program, by most accounts, was a disaster its first two years. Barry says that was the result of trying to do too much too fast--namely to keep a campaign pledge to double the number of summer youth jobs during his first year in office.

During that same period, the Barry administration's year-round job training and placement efforts for all ages were stalled by bureaucratic inefficiency.

Enter Donaldson

In late 1980, sensing political disaster, Barry dispatched his most trusted adviser, Ivanhoe Donaldson, to take over from another Barry appointee and get some results.

The Barry administration can now claim some results in battling unemployment through its jobs programs. It also has made an effort to hold the line on employers' costs for unemployment and workers compensation insurance, which businessmen felt were already exorbitant.

Barry has kept construction on schedule and launched a heavy promotion campaign for the $100-million Convention Center, due to open at the end of the year. Fifty conventions already have been booked, and the center is expected to be a magnet for downtown development.

Downtown construction continues to boom, with more than 70 new buildings completed or under construction, some of them with Barry's "D.C. on the Grow" banners on them, even though many of the buildings were in the works before Barry took office.

The proliferation of building obscures a strong undercurrent of dissatisfaction among businessmen with local government.

A city study compiled in 1980 and released last June found that of 246 Washington firms surveyed, half were considering moving to the suburbs--and taking with them 2,300 jobs-- because they saw greater opportunity there.

A number said they had "a very poor opinion of the management of the District government, the lack of incentives for business, and what businessmen felt was an antibusiness attitude on the part of the local government," according to the report, prepared by a consultant firm headed by former Federal Reserve Board governor Andrew Brimmer.

Barry said in an interview last week that since the report was released, the business community's attitude toward the city has improved markedly. As proof, he cited the large amount of money contributed to his reelection campaign by businessmen.

"We're trying," he said. "They businessmen know we cannot change this city overnight into something that it was not, but they know that we have a commitment, the philosophy is there, that the feeling of jobs and business is there."

"Business is not leaving here in droves. You have a business leaving here, a business leaving there. And business coming in . . . . You don't have any mass exodus."

High Business Taxes

The areas that Barry has been unable to improve include D.C. real estate taxes. The commercial property tax rate here has risen by 16 percent--from $1.83 per $100 of assessed valuation in 1978 to $2.13 today--and overall District business taxes are still the highest in the metropolitan area.

During the campaign, Barry promised to reduce the tax rate for commercial and residential properties if assessments increased sharply. While he has done this for residential, the commercial rate was increased in 1980.

"I found out the city needed more money than we had," Barry said. "We had a deficit and needed money, and had to get it someplace, to pay for Medicaid, pay for my housing programs, to pay $18 million for my jobs program next year. If I'm going to pay for my people program, I need money."

Businessmen large and small also say that a major irritant in their relations with city government is the lack of a "one-stop" center where businesses can register for government regulation--something else Barry had promised in the 1978 campaign. Under the current system, they must go to different places to get the necessary permits and licenses to build and operate.

"There's no coordination between departments," said Johnny Distad, who owns a gasoline station on Capitol Hill and said he had to stand in line for six to seven hours earlier this year to get a certificate of occupancy.

"One guy said go upstairs and that guy sent me downstairs; the guy downstairs said go upstairs again, and the guy upstairs took my application," Distad said. "Why do they hassle someone getting into business?"

Barry says bureaucratic problems have delayed him from implementing a one-stop center. Lawrence Schumake III, head of the D.C. Office of Business and Economic Development, said such a center should be in operation in about six months.

Barry has made some effort to attract new business to the city, as he had promised during the campaign. The city has made $419,000 in loans to seven businesses. It also has expedited permits for some major projects, such as a 1.2-million-square-foot office building at 1300 New York Ave. NW.

Barry officials cite the Design Center, D.C., a complex of furniture wholesalers that will open in a seven-story, renovated warehouse at 4th and D streets SW in December and provide an estimated 300 to 500 jobs for city residents.

Barry made a trip to Chicago to woo the businesses to come here. "Without my personal involvement, they wouldn't be here," Barry said. Thomas Lyman, a vice president for the Design Center, D.C., agrees.

By contrast, Barry has not realized another campaign pledge to reverse the trend of supermarkets leaving Washington. The city suffered a net loss of two stores during Barry's term, according to figures provided by Schumake's office.

"Without the leadership of this administration, there might have been 10 out," Barry said. He noted that smaller stores have left while larger ones have arrived. As for the ones leaving, he said, "We didn't run them out of here. I'm not responsible for them leaving. I'm not going to be the victim in that."

As a candidate, Barry also promised to provide more business opportunities for minorities, and as mayor he has increased from 17 percent to 31 percent the total of city goods and contract dollars awarded to minorities.

While more minority firms have been certified and given a chance to bid on contracts restricted to minority bidding, however, the General Accounting Office reported last year that Washington's minority business opportunity helped primarily a handful of well-established firms and did little to benefit struggling entrepreneurs.

The GAO found that a number of minority businessmen were also enduring hardships because the D.C. government was taking from one to six months to pay them for services received.

Barry said in response that the GAO report was outdated. "Of course, there were difficulties in the past," he said. "There were long delays in people getting paid . . . That's all a thing of the past."

Barry's campaign promises have left unfulfilled expectations among many city businessmen in neighborhoods where he promised revitalization but has not yet delivered.

R.J. Turner, a realtor whose office is on the same block on H Street where Barry made his 1978 campaign speech, said, "He said he was going to take the boards off the windows, going to revitalize the area. I don't see how someone could try for four years and not succeed."

Barry acknowledged that, "H Street is a disaster area." He said the city's urban renewal agency had tried to involve the small businesses there as developers. But the program failed, he said, and the agency is now trying to formulate a new plan.

Aloishes Briscoe, vice president of the Ward 7 Business and Professional Association in far Northeast and Southeast Washington, said, "Basically we see nothing. Everything that was done was done by individuals. We feel there is a tremendous amount more that the present administration can do in economic development east of the Anacostia River."

Russell of the Anacostia business group said some businesses in that neighborhood have received loans to expand and grants to fix up their store fronts, but little training and counseling to improve their business skills. "I don't think they're really getting to the guts of the small businessman's problems," Russell said.

Schumake said the administration has delayed rushing into "segmented projects" in some neighborhoods until it completes a master plan for development throughout the city."

Barry's economic development proposals were inextricably linked to his jobs program.

"By stimulating economic growth which produces more jobs, more citizens have a chance for employment and self-sufficiency," he said during the campaign. "As the city's dependent population is reduced, city funds are freed to increase services to all citizens."

Mayor Frustrated

During the years that Barry has been mayor, the city's population has continued to decline. The number of available jobs has increased only slightly--from 597,500 when he took office to 599,400 as of March--despite the downtown building boom. D.C. residents hold about half those jobs.

Barry says he has been frustrated in his efforts to convince businessmen to hire more people. As a result, he says, he has put his emphasis on generating jobs through the city government.

By using local funds to subsidize job training efforts in business, Barry said, he has created a total of 7,429 year-round jobs and 40,552 summer jobs. It is difficult to confirm these figures because the administration, citing privacy considerations, will not release the names of any job recipients.

In its early stages, the mayor's summer youth employment program was a public relations nightmare. Barry had pledged to place 30,000 Washington teen-agers his first year in office and came close to that target.

But hundreds of teen-agers complained they hadn't been paid or had been promised jobs that didn't materialize. One federal official who monitored the program in those early days described it as a "disaster."

Barry acknowledges his mistake. "The bureaucracy was not prepared to take that infusion into it," he said last week. "It was like a shock to it."

Donaldson's first order of business as the new head of the Department of Employment Services was to straighten out the program, which, it's generally agreed, he did.

In the process, however, the program gradually shrank from about 28,600 jobs in 1979 to a projected 17,000 this summer, partly due to a loss of federal support and partly due to scaled-down ambitions. That is about the same size as the 15,000 summer youth jobs available in 1978, when Barry ran for mayor saying he could double the number of summer jobs for youth.

Donaldson also pressed forward with programs to create full-time jobs. He negotiated contracts with outside agencies and firms to employ a total of 5,926 high school students, high school dropouts and adults with dependents.

Another 800 jobs were arranged through various departmental programs, while apprenticeships were arranged for about 7,600 youths, according to Department of Employment Services figures.

The adults-with-dependents program has helped unskilled persons with children to obtain 10 months of on-the-job training in private industry, with the city and private firms splitting the cost of the training.

The program may lead to a permanent job, although there is no guarantee. Officials said that 500 of the nearly 4,000 trainees have found full-time employment so far.

Donaldson said the mayor should also be credited with reorganizing the employment services department to improve services. Waiting lines are shorter for those applying for unemployment compensation, and some work formally done at the central office is being handled by mail or at regional offices.

"People are getting an integrated service now," he said. "Before, people had to go to six to seven agencies. Now they go to one. Plus they are getting better, faster service.

Yet, a senior U.S. Department of Labor official who oversees the District's performance with federal funds, said Donaldson's department still ranks among the lower third of all agencies in the country in efficiency and at the bottom in unemployment compensation services.

The official conceded, though, that things generally have improved in recent years, particularly the summer jobs program.


Barry does not claim perfection in the area of jobs and economic development.

But, he says, "I maintain if I had not been mayor, and someone else had been mayor, in terms of what was there and available to the mayor, I don't think we would have had the same kind of progress that we've had--even though there's some shortcomings here and there--because I have taken the city to the heights and witnessed the greatness." CAPTION: Picture 1, Marion Barry delivered his campaign speech on jobs and economic development on H Street, NE, a once-thriving commercial artery devastated in the 1968 riots. Most proposals for revitalizing it and other depressed corridors of Northeast and Southeast Washington remain in the planning stage. The Barry administration's official response is that the mayor is more concerned about developing a master plan than in rushing into "segmented projects." By Frank Johnston -- The Washington Post; Picture 2, To lure business, the city has made $419,000 in loans to seven firms and has expedited permits for some major projects,such as a 1.2 million-square foot office building at 1300 New York Ave. NW for which Mayor Barry says he has created a "successfyl climate" for development but needs more time to translate plans to action. By James A. Parcell -- The Washington Post